CME Group’s cobalt futures grows in popularity

CME Group’s cobalt futures grows in popularity

According to Reuters, activity in CME Group's cobalt futures has soared far above London Metal Exchange volumes this year.

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The report suggests that a wide range of industry players are using CME's cash-settled contract as they want a liquid instrument to hedge cobalt.  Meanwhile, the LME's cobalt contract has failed to gain traction due to a lack of interest from its members.

Volumes on the CME's cash-settled cobalt contract, launched in December 2020, climbed 270% to over 11kt Co over the January-October period compared to the same period in 2021. 

Meanwhile, the LME's cash-settled cobalt contract has not traded since its launch in 2019, while interest in its physically-deliverable contract has faded, evidenced by a 68% drop in volumes to 238t in Jan-Oct from the same period last year. 

The comparison comes after a challenging year for the LME – mainly centred on nickel.  Last month, significant price volatility returned to the LME nickel market.  These are in part the after-effects of March's short squeeze, the subsequent trading suspension and the controversial decision to cancel billions of dollars of nickel trades.

 

 

  • 05 Dec 2022
  • UK
  • Cobalt

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